Zombie Colleges are the walking dead of private colleges. They have: no cash, cannot make payroll, pay bills or debt services, violated their debt covenants, and only a few faculty who work for nothing. [1<\/a>] The Sisyphean hill for these colleges is very high and difficult to climb<\/p>\n because they often have lost their accreditation. Yet, they still try to recruit students. Zombies are the classic example of \u2018caveat emptor\u2019.<\/p>\n The simplest way to find Zombies is to look for private colleges that have reported negative unrestricted net assets (the assets that hold mostly funds for on-going operations \u2013 payrolls, payables, debt service).<\/p>\n Table 1 is a five-year report on Zombies with 2021 as the last year. There were nineteen<\/p>\n colleges reporting negative unrestricted net assets over the five-year period. Eleven of those<\/p>\n colleges had a negative change in enrollment for the period. There price elasticity was less than one, which means that changes in tuition discounts had little or no effect on enrollment. For<\/p>\n those colleges to get any increase in enrollment, they had to offer a tuition discount of 81.8%. So, if they did have increased enrollment, those colleges only received 20 cents in cash from a dollar of tuition revenue. These huge discounts explain why they were not able to escape their<\/p>\n doomsday collapse.<\/p>\nTable 1<\/h1>\n
Zombie Colleges – Five Year Report<\/strong><\/td>\n<\/tr>\n| Negative Unrestricted Net Assets for 5 years<\/strong><\/td>\n | Elasticity for Last Year<\/strong><\/td>\n | Tuition Discount for Last Year<\/strong><\/td>\n | Negative Change in FTE for 5 Years<\/strong><\/td>\n<\/tr>\n | 19<\/strong><\/td>\n | 0.41<\/strong><\/td>\n | 81.8%<\/strong><\/td>\n | 11<\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n | The nineteen colleges were diving into Zombie oblivion at a time when the government dropped huge piles of pandemic largess to keep colleges alive. Well, they may not be alive, but they are<\/p>\n still there despite being Zombies bringing in students and providing unknown educational services for them. These colleges cannot survive long on a no cash and no accreditation<\/p>\n regimen. Typically, the end comes when the U.S. Department of Revenue no longer permits the college to issue federal financial aid to students. Then the Zombie colleges joint the Zombie<\/p>\n march to the Zombie Cemetery singing \u2013 Ha! Ha! Ho! Ho! Here we go to haunt our Lemming friends as they follow us to the Zombie Boneyard!<\/p>\n Reference<\/h1>\n<\/a> 1 Quintana, Chris (I May 9, 2024) (Retrieved May 10, 2024);\u201d Zombie Colleges? These universities are living another life online, and no one can say why\u201d; USA Today; Zombie<\/a><\/p>\n |